A majority of companies expect a surge in M&A activity once markets stabilize, but most feel their teams are unprepared to handle the deal flow, according to a new survey of senior HR professionals by WTW.

Why it matters: The gap between market optimism and operational readiness points to significant risks and opportunities. Companies that haven't prepared their HR functions for accelerated due diligence could see deals fall apart or destroy value post-merger.

The big picture: After a record slow start to 2025, 54% of dealmakers now anticipate an increase in M&A activity, suggesting significant pent-up demand. Only 19% expect a decrease.

  • This sets the stage for a potential wave of deals with compressed timelines, especially for transactions aiming to close by year-end.
  • However, 65% of HR teams feel less than fully prepared to manage their deal portfolios, signaling a critical vulnerability.
Zoom in: The survey identified several core challenges hampering HR due diligence (HRDD).

  • Data integrity was the top concern, with 66% of respondents citing issues with data completeness and quality.
  • Less than 20% of HR teams believe they are properly included in preliminary deal negotiations, preventing early assessment of people-related risks.
  • The focus of talent risk is shifting, with 78% identifying key talent below the executive level as their highest priority.
By the numbers:

  • 50% of respondents said retention of non-executive talent was the leading metric for integration success, compared to just 29% for leadership retention.
  • 74% of non-US companies and 54% of US companies stated that aligning cultures remains the top overall integration challenge.
What they're saying: “Low deal volumes during the first half of 2025 suggest pent-up demand fuelling a new wave of deals when market stability improves," said Jim Plomer, a global M&A consultant at WTW. "Proactively assessing people-related challenges and opportunities is critical to enhancing deal value and easing integration.”

What to watch: New technologies are on the horizon, but adoption is cautious.

  • While 65% of respondents believe Gen AI will impact deal-making within two years, most are in a “wait and see” mode. The most promising uses are seen in legal analysis and employee communications.
  • Virtual data rooms (VDRs) are now standard but don't solve core data integrity issues. The report notes they can be used to overwhelm buyers with disorganized data, making effective due diligence more difficult within tight time windows.

The Barometer Survey is a global survey conducted by WTW every two years to gauge current and future trends in the M&A and divestiture space. For the 2025 survey, WTW surveyed over 80 HR leaders, based in North America, Europe, the Middle East and Asia Pacific, involved in their organization’s deal-making.

SOURCE: WTW

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